KUALA LUMPUR (Dec 16): Loss-making Takaso Resources Bhd, which manufactures condom and baby care accessories, saw its net loss narrowed 57.47% to RM413,000 or 0.25 sen per share in the first quarter ended Oct 31, 2014 (1QFY15) from RM971,000 or 0.65 sen per share a year ago on improved sales from its manufacturing subsidiary.
Revenue for the quarter, however, slid 6% to RM10.91 million from RM11.57 million in 1QFY14, no thanks to the slowdown in the recycling cathode ray tube (CRT) glass business, its filing to the local bourse today showed.
Takaso's external sales for its manufacturing division dropped 48% to RM3.43 million from RM6.61 million previously, while its trading division recorded a 42% jump in external sales.
On outlook, Takaso said it has already reduced its dependency on the Middle East and Europe by venturing into Asian countries, where the market is more stable and trade rules and regulations are more mature.
"The group, being export orientated with major distributors based in the Middle East and Europe, continues to foresee a challenging outlook despite recovering political and debt crisis. The situation in these two continents has not recovered to the expectation. The customers are buying smaller quantities to reduce their business risk," it noted.
"There is also plan to increase its products varieties to leverage the Group's market risk coupled with some diversified business to enable to Group turn profitable with sustainable growth," the group said.
Takaso added that its expects that current financial year ending July 31, 2015 to be an "extreme challenging year" as the group continuously making its best effort to improve its current operation and identify a suitable new business to venture.
Despite being loss making for the past five years, shares in Takaso have appreciated 124.49% so far this year. The stock closed 3 sen higher to 55 sen per share today, giving it a market capitalisation of RM108.8 million.
Interestingly, Lay Hong Bhd group managing director Yap Hoong Chai emerged as a substantial shareholder in Takaso yesterday, after he purchased 10 million shares or 5.06% stake in the latter via a private placement exercise.